May 29, 2012
|USD/CAD Open 1.0233-38 Overnight Range 1.0210-1.0260
The Canadian dollar marked time yesterday and overnight following Friday’s spike through USD resistance at 1.0280 to test 1.0300. Asian markets got an initial boost on speculation that China would unveil a stimulus plan but it was quickly denied by an ‘official” report in the Xinhua News agency. The odds on a Greek Euro exit, once considered a long shot, have evolved into almost a “sure thing” thanks to various reports from major banks and Investment firms. These reports predict 1) sovereign debt defaults 2) Bank runs 3) economic slowdown as exports decline in Russia and China. Fortunately, a new poll out of Greece suggests 75% of Greeks want to keep the Euro-they just aren’t so keen on any austerity measures. These events have already pushed the loonie lower so further losses should be contained ahead of this weeks, Canadian GDP data and Friday’s US employment report. WTI oil is $91.23 and gold is $1,572.88 Asian equity indices were higher as are the European indices (except FTSE and IBEX 35)
The short term USD/CAD technical’s are bullish which is the base of the steep uptrend line since the beginning of May. A move below this level would indicate further CAD$ gains to 1.0120. A move above 1.0305 suggests further gains to 1.0420. For today, USD support is at 1.0220, 1.0205 and 1.0180. Resistance is at 1.0255, 1.0280 and 1.0305
The markets will have to contend with a mixture of rumors and tape bombs from the Euro zone, more speculation on Chinese stimulus intentions ahead of Friday’s key US employment data which argues for further choppy trading within current ranges.
In other news, the Financial Post reported that the new Leader of the NDP which is Canada’s official opposition party, has managed to refinance his mortgage 11 times since 1985. This doesn’t bode well for Canada’s finances if his party ever got their hands on the cheque book. Using your residence as an ATM-hmmm what could possibly go wrong with that strategy?.
Today’s Range 1.0205-1.0270